WuBlockchain’s macro preview for the week of Sept. 28 to Oct. 4 says investors will be watching a series of releases from China, Japan, the eurozone and the United States, with U.S. nonfarm payrolls and the ISM manufacturing report serving as the final pricing anchors of the week.
Sept. 30: China to release September PMI data
At 09:30 Beijing time on Wednesday, Sept. 30, China is scheduled to publish its September manufacturing PMI, non-manufacturing PMI and composite PMI.
The preview notes that in August, China’s manufacturing PMI stood at 49.8, the non-manufacturing business activity index was 49.0, and the composite PMI output index came in at 49.5. The September release is expected to show whether the rebound in manufacturing demand is spreading into services and construction, with attention on new orders, export orders, employment and price components.
If manufacturing returns to expansion territory and new orders continue to improve, that would support the renminbi, industrial metals and Chinese equities. If both manufacturing and services remain below 50, the report says, it would signal weak domestic demand and lift expectations for additional policy support.
Oct. 1: BOJ meeting summary and Tankan survey due
At 07:50 Beijing time on Thursday, Oct. 1, the Bank of Japan is set to release the summary of opinions from its September meeting alongside the third-quarter Tankan survey.
According to the preview, the BOJ raised its policy rate to 1.25% at its September meeting. The summary is expected to show how board members view inflation, the yen and the pace of future rate hikes, while the Tankan survey will update business sentiment, capital spending, price expectations and exchange-rate assumptions.
If corporate confidence and capital expenditure remain strong and policymakers continue to stress inflation risks, Japanese government bond yields and the yen could move higher. If the discussion puts more weight on growth risks, expectations for back-to-back tightening could weaken, and yen carry trades may continue.
Oct. 1: U.S. September ISM manufacturing PMI
At 22:00 Beijing time on Thursday, Oct. 1, the United States will release its September ISM manufacturing PMI.
The article says the August ISM manufacturing PMI was 54.6, marking an eighth straight month in expansion. Markets will focus on new orders, production, employment and the prices index to judge whether factory activity is holding up and whether energy and trade costs are still pushing up input prices.
If manufacturing stays on a relatively strong expansion track and the prices index remains elevated, that would reinforce expectations for higher-for-longer rates and put pressure on U.S. Treasuries and richly valued technology stocks. If new orders and employment fall back sharply, it would suggest that higher financing and operating costs are starting to weigh on real demand.
Oct. 2: Eurozone CPI and U.S. payrolls in focus
The eurozone is expected to publish its preliminary September CPI at around 17:00 Beijing time on Friday, Oct. 2.
The preview says eurozone CPI rose 3.3% year over year in August, with energy prices up 14.3%. Core inflation, excluding energy, food, alcohol and tobacco, was 2.4%. The September reading is expected to show whether the latest inflation rebound is still mainly an energy story or whether it has spread into services and goods prices.
If energy inflation keeps rising and core inflation stays sticky, that would increase pressure on the European Central Bank to tighten policy further and affect euro-area bond yields, the euro and valuations for global growth stocks. If core inflation eases, markets may scale back expectations for a steeper ECB rate path.
Later the same day, at 20:30 Beijing time, the U.S. will release its September nonfarm payrolls report.
The article notes that the U.S. added 162,000 jobs in August, while the unemployment rate held at 4.1%. Investors will look at headline job growth, the unemployment rate, average hourly earnings and revisions to prior data to assess whether labor demand is still strong enough to support wages and consumption.
If payroll growth and wage gains remain firm, the likelihood of further Federal Reserve tightening would rise, pushing the dollar and Treasury yields higher. If hiring slows clearly and prior figures are revised down, rate pressure may ease, but concerns about weaker consumption and softer corporate earnings could grow.
What markets are watching this week
The preview concludes that China’s PMI will be watched for signs that new orders and services activity are moving back into expansion. In Japan, the BOJ summary and Tankan survey are expected to show whether companies are still willing to expand capital spending after the latest rate hike. In the eurozone, the key question is whether the 14.3% rise in energy prices is still feeding into core inflation.
For the U.S., ISM and payrolls are described as the final pricing anchors of the week. If the economy remains firm, markets may move to price in a higher rate path. If employment and orders cool quickly, trading focus could shift from inflation to growth and earnings risks.